Oracle Attacks The Bottom Line With High-Performance Engineered Systems

Larry Ellison, executive chairman and chief technology officer of Oracle, introduced the fifth generation of Oracle Engineered Systems—bundles of integrated hardware, software, networking, and storage highly tuned for maximum performance—and spelled out a significant shift in strategy regarding those systems. Oracle intends to compete on price as well as performance with its integrated systems, especially in technology aimed at the core of the data center.

The dynamics of internal data centers are in flux, as companies look to cut IT costs and complexity while figuring out the role of cloud computing. With its new approach, Oracle has staked out a low-cost, high-performance data center play that complements its extensive cloud offerings and makes for a complete set of enterprise technology products and services.

Today, the basic architecture of most data centers revolves around commodity Intel two-socket servers, which IT engineers use as building blocks for customized systems to run their organizations’ mission-critical applications. It’s a low-cost, DIY strategy intended to squeeze as much as possible out of limited IT funds.

Yet, the numbers don’t necessarily add up. “We make the argument that these do-it-yourself data centers are expensive,” Ellison explained, pointing to the considerable amount of integration and optimization work needed to make such customized systems run their best.

For the last five years, Oracle has offered its Engineered Systems, such as its Oracle Exadata Database Machine, as alternatives to such labor-intensive customization work. Because these systems perform at a very high level, they offer a cost-performance advantage over customized systems.

Still, they were expensive, Ellison admitted. “We never really aimed at the lowest possible purchase price with our Engineered Systems, “ he said.

That’s changed. “Our strategy now is to deliver not only the highest-performance appliances and machines in the industry, by a large margin, but now, with the fifth version of our Engineered Systems, to deliver by far the lowest price for the data center core,” Ellison explained.

As an example, Ellison pointed to price disparity between the new version of its Oracle Virtual Compute Appliance (VCA), which bundles Intel two-socket servers with Oracle software, networking, and storage technology, and that of its main competitor, Cisco’s Unified Computing System (UCS), which bundles Intel servers with Cisco technology and that of other vendors such as Red Hat and VMware. At the hardware level, the Oracle VCA X5 incorporates 27 compute servers (972 cores), along with two interconnects and a rack infrastructure, which costs $562,000 plus $22,000 in annual support. By comparison, Cisco’s UCS M4, with 27 blade servers (972 cores), along with chassis, two interconnects, and rack infrastructure, costs $912,000 plus $26,000 annual support.

The same price disparity applies at the software level. Oracle VCA’s Linux operating system, along with its virtual machine and enterprise management software, is licensed for $45,000 per year. Comparatively, the software in Cisco’s UCS, which runs the Red Hat distribution of Linux, VMware’s virtual machine software, and Cisco’s management software, costs $256,000 up front, and $166,000 per year in license fees.

When combined with the Oracle FS1 Series Flash Storage System, the VCA X5 represents a complete, high-performance data center system that’s inexpensive, easy to implement, quick to deploy, and provides considerable infrastructure ROI. “You pay half as much, but you have to be willing to go twice as fast,” Ellison joked.

The same low-cost, high-performance strategy applies to the new version of the Oracle Database Appliance X5. “These are the lowest list prices in the industry combined with the highest degree of automation and the most testing, because we engineer and test all the pieces, we integrate all the pieces, so you don’t have to,” Ellison pointed out.

He also described improvements to the flagship Oracle Exadata X5 database systems, such as faster performance and “elastic configuration”—the ability to expand the system one server at a time.

Ellison admitted that Oracle didn’t invent such integrated systems. But because the company has engineering expertise at all levels of the computing stack, “we think we can do a better job,” he said. So far, Oracle has shipped more than 10,000 of its Engineered Systems.

As for the debate between cloud and on-premises systems, it’s not an either-or proposition. “Clouds are going to get bigger, clouds are going to get more popular,” Ellison said, “but data centers are not going to go away.”